discharged - reaffirming mortgage

[BoomerSooner]

I have a mortgage with Bank of Oklahoma. We never received reaffirmation paperwork, but were discharged last month. I'd like to reaffirm, because I'd like to see those payments rebuilding my credit. I called today, and they claim that they do NOT reaffirm under any circumstances, nor do they report to the credit agency on my account anymore, no exceptions. Has anyone ever come across a lender who REFUSES to reaffirm? I just find it strange that they'd prefer for me to ride-throigh,

[blessed]

No experience but someone here said Wamu doesn't reaffirm anymore either.

Doesn't make sense to me why a bank would turn it down.

[LALADY]

I'm in the throws of BK. I have continued to pay my first and my second mortgages on time and in full each month. The first did not ask me to reaffirm. The second did, and I have declined since I don't know what life will bring me down the road. Both mortgages have reported to all 3 credit reporting agencies that my mortgage is part of my BK, because it is. I have them listed as secured, want to keep. Both mortgages continue to report monthly that I am paying in full, on time, and as agreed to pay. Don't know if that will change after my BK is over, but so far so good.

[LALADY]

WAMU was taken over by Chase. Chase is my first and is reporting promptly and accurately.

[LALADY]

Last thought, one of my many attorneys is the one who advised not to reaffirm because I cannot foresee what life may throw at me down the road.

[BigHairyPig]

First with Bank of America, Second with Wells Fargo

Bank of America will not reaffirm, current on all payments. Wells Fargo (2nd) will not accept my calls, and closed down my online access, quit mailing my statements for the March 2010 payment. Walked into branch and made payment today no problem. Not quite sure what to think about this. Had several credit cards that are unsecured and part of the bk. Current on the WF second. Don't really know how to handle this particular one on the Statement of Intentions....anybody in the same boat? It's like they won't talk to me, so how do I reaffirm, not reaffirm (house is upside down, I'm sure they see that).

[Mensa1]

Bank of America will not reaffirm, current on all payments. Wells Fargo (2nd) will not accept my calls, and closed down my online access, quit mailing my statements for the March 2010 payment. Walked into branch and made payment today no problem. Not quite sure what to think about this. Had several credit cards that are unsecured and part of the bk. Current on the WF second. Don't really know how to handle this particular one on the Statement of Intentions....anybody in the same boat? It's like they won't talk to me, so how do I reaffirm, not reaffirm (house is upside down, I'm sure they see that).

BHP: With house upside down WHY would you want to reaffirm on the 2nd, even if WF was interested in doing so? The wonder of BK is a fresh start and by reaffirming a mtg that is out of an equity position is akin to you having the shovel in hand and digging as fast as you can to bury yourself. Not a good idea.

There is no good idea to reaffirm real property in my opinion. Who care if lender reports to CRA. If you want to build your credit do it in other ways that do not have the potential downside of an undervalued asset along with it.

Not reaffirming give the best of both worlds. You get to keep the house just the same, and IF for any reason down the road you decide to walk away from the property, it won't hurt your credit one bit; you are NO longer responsible for the loan repayment at all. f you pay great, keep the house. If you don't then move on without all the negatives down the road.

Now it should be explained that the lenders who are not reaffirming, or those that wish you to reaffirm and you choose not to, they could at some point down the road decide to foreclose; but highly unlikely. This may be too large of a :what-if: for some, but the potential of it happening is slim since the bankers are up to eyeballs and thensome with problems that they can't solve. The last thing that they are looking for is to pick a fight with a person who is paying on time and keeping up the collaterol. Now the exception for BHP is that with your second mtg you aren't paying, but why would WF ever come after that property to foreclose and get nothing? It simply isn't going to happen. Someday, if property values ever return and that 2nd mtg is in an equity position, then maybe......... but we are a long way from that happening, IMO. And....... if that ever did happen, WF will no longer own that 2nd mtg and my bet is whichever JDB that acquires the mtg will settle with you downstream for a whole lot less than you owe now. So it is a win-win deal. Just pay the 1st mtg, forget the 2nd and life goes on. When the BK is discharged then see what happens; prolly nuttin.

BTW, BHP I am assuming you are filing a Ch7 to liquidate and NOT a Ch 13? The reason I ask is because you can actually get rid of, GONE, the 2nd mtg in a Ch 13. It essentially just turns it into an unsecured debt like any other CC or other obligation. Sometimes the 2nd's get sumthin, sometimes they get nuttin, but when the plan is fulfilled and discharged, so is the 2nd mtg; released, same as paid in full, even if it wasn't.

[BigHairyPig]

Thanks for the reply mensa1. Your reply is spot on. I am just trying to make sense of a very stressful situation. If I stop paying my second (I'm current) and we are 3 weeks post 341 meeting, what's the worst that could happen, there's no equity right now!! But after a few years, when we might be able to sell, won't there be a lien hold on the property? I didn't quite follow the part about Wells Fargo not being on the second anymore. Any insight into that is appreciated. (I think you are referring to the fact the second is sold off to a third party, is that what happens?) This is why I sometimes wish we had an attorney who has dealt with this before. Otherwise the process has been manageable.... thank you for your advice, it's appreciated...

[pcn]

BHP, I have a similar thread, asking when it is safe to quite paying on the 2nd. We have BOA for the second, and they don't do reaffirmations. Our statement of intentions listed reaffirm. Per our atty, if we stop paying before discharge (but after 341), the 2nd could file for a relief of stay. I am looking for clarification, since it would be nice to start saving for a settlement as soon as possible.

[MrsDixon]

You can't reaffirm a debt after it has been discharged. A reaffirmation has to be done during the 90 days you are going through BK. I filed a 7 in 10/2008. I have a 2nd mortgage that is costing me $650.00 per month. I didn't reaffirm on either mortgage and am in a similar situation right now. I'm on time with both mortgages but I'm asking myself why I'm struggling like this (DH makes less than half of what he did when we purchased house in 2003). I think I am going to continue paying the 1st (WF/FHA) and stop the payment on the 2nd. I am so scared to do it though.....

I am praying that someone will settle with me for 10/20/30% a couple years down the road. I owe $205K between both mortgages and my house is probably only worth $150K

[Mensa1]

I think I am going to continue paying the 1st (WF/FHA) and stop the payment on the 2nd. I am so scared to do it though.....

I am praying that someone will settle with me for 10/20/30% a couple years down the road. I owe $205K between both mortgages and my house is probably only worth $150K

I realize that it is a scary situation to cut off the 2nd but what are they going to do? Unlikely they are going to foreclose, it simply makes NO sense. They have only got one place to look for repayment and that is from the property and today their chances are slim and none. Slim just left town.

The OC may sell your mtg/note off to a JDB, (for pennies, cause that is all it is worth; little more than cc debt after a Debtor Bk) and someday that JDB may resurface or they would sit there and hope that the mkt recovers and you wish to sell, and they then accept the best amount they can get. One of the above scenarios is apt to happen, but NOT foreclosure.

I think that you have to get to the point where you look at the facts, unemotionally. You are paying way too much money for your house in todays market. If you roll the dice and stop paying on the 2nd, and they surprise you and do something stupid and foreclose... you could move up the street and rent for half the price. (almost in any neighborhood today). But my crystal ball sayz it ain't gonna happen.

[montana59451]

I am with B of A also. I filed and stated that I wanted to reaffirm then found out that they don't reaffirm, get this one...B of A considers continued payments ARE the reaffirmation! They couldn't tell me if they would continue to report to Bureaus sometimes they do and sometimes they don't. Just completed a loan mod with them and have them fixing my credit reporting to show current and now this. I really wanted to reaffirm so I could start rebuilding my credit immediately. Wife has pickup loan with Capital One and is reaffirming on that, I wonder if Cap One will reaffirm or just do pass through as well?

[Mensa1]

I really wanted to reaffirm so I could start rebuilding my credit immediately. Wife has pickup loan with Capital One and is reaffirming on that, I wonder if Cap One will reaffirm or just do pass through as well?

I really hate to hear of someone reaffirming a mtg just for the credit reporting data that goes along with it. Unless there is lots of exempted equity, but that isn't the case today in 98 out of 100 cases, it seems. Having the ability to walk away from that mtg unscathed if the world falls in is way more valuable IMO than any reporting that one creditor can do. Just my opinion here, we are far from seeing the worst of the real estate problems and sinking values, so why be liable for the balance going forward.? But you will do what suits you, not me.

Yes, Crap One will likely do the formal reaffirmation on your wifes p/u; personal property not real property. Those two (personal vs. real property) are treated a bit differently, in most cases.

[montana59451]

Mensa

I agree with you but we had just completed an in house loan mod with them and wanted to be sure that they didn't pull the mod. But all is OK with the mod and at that point I really don't care whether it reaffirms or not. I hope I will be one of the ones they DO report. I can't see how they consider to be the reaffirmation by just making continued payments....wonder how that would hold up in court?